IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v59y2019ic6.html
   My bibliography  Save this article

Time series aggregation – A new methodological approach using the “peak-load-pricing” model

Author

Listed:
  • Pöstges, Arne
  • Weber, Christoph

Abstract

Coping with fluctuating renewables and large-scale integrated systems raises new challenges related to achieving simultaneously manageable computation times and sufficient levels of detail in energy optimization models. The present contribution proposes a new methodological approach for identifying appropriate time series aggregation, which may complement heuristic and numerical approaches. The basic idea is to define an evaluation criterion that assesses the quality of the solution of the model based on the aggregated time series (“reduced problem”) compared to the solution of the original problem. Analytical results may be derived for a simplified version of this problem, known as the “peak-load-pricing” model.

Suggested Citation

  • Pöstges, Arne & Weber, Christoph, 2019. "Time series aggregation – A new methodological approach using the “peak-load-pricing” model," Utilities Policy, Elsevier, vol. 59(C), pages 1-1.
    • Handle: RePEc:eee:juipol:v:59:y:2019:i:c:6
    DOI: 10.1016/j.jup.2019.05.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178719300207
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2019.05.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hanan Luss, 1982. "Operations Research and Capacity Expansion Problems: A Survey," Operations Research, INFORMS, vol. 30(5), pages 907-947, October.
    2. Andrea Consiglio & Angelo Carollo & Stavros A. Zenios, 2016. "A parsimonious model for generating arbitrage-free scenario trees," Quantitative Finance, Taylor & Francis Journals, vol. 16(2), pages 201-212, February.
    3. Sunderkötter, Malte & Weber, Christoph, 2012. "Valuing fuel diversification in power generation capacity planning," Energy Economics, Elsevier, vol. 34(5), pages 1664-1674.
    4. Haris Doukas & Alexandros Nikas & Mikel González-Eguino & Iñaki Arto & Annela Anger-Kraavi, 2018. "From Integrated to Integrative: Delivering on the Paris Agreement," Sustainability, MDPI, vol. 10(7), pages 1-10, July.
    5. Rieder, Andreas & Christidis, Andreas & Tsatsaronis, George, 2014. "Multi criteria dynamic design optimization of a small scale distributed energy system," Energy, Elsevier, vol. 74(C), pages 230-239.
    6. John T. Wenders, 1976. "Peak Load Pricing in the Electric Utility Industry," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 232-241, Spring.
    7. Grubb, Michael, 1993. "Policy modelling for climate change : The missing models," Energy Policy, Elsevier, vol. 21(3), pages 203-208, March.
    8. Hung-po Chao, 1983. "Peak Load Pricing and Capacity Planning with Demand and Supply Uncertainty," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 179-190, Spring.
    9. Voll, Philip & Klaffke, Carsten & Hennen, Maike & Bardow, André, 2013. "Automated superstructure-based synthesis and optimization of distributed energy supply systems," Energy, Elsevier, vol. 50(C), pages 374-388.
    10. Mavrotas, George & Diakoulaki, Danae & Florios, Kostas & Georgiou, Paraskevas, 2008. "A mathematical programming framework for energy planning in services' sector buildings under uncertainty in load demand: The case of a hospital in Athens," Energy Policy, Elsevier, vol. 36(7), pages 2415-2429, July.
    11. Spiecker, Stephan & Vogel, Philip & Weber, Christoph, 2013. "Evaluating interconnector investments in the north European electricity system considering fluctuating wind power penetration," Energy Economics, Elsevier, vol. 37(C), pages 114-127.
    12. Crew, Michael A & Fernando, Chitru S & Kleindorfer, Paul R, 1995. "The Theory of Peak-Load Pricing: A Survey," Journal of Regulatory Economics, Springer, vol. 8(3), pages 215-248, November.
    13. Peter O. Steiner, 1957. "Peak Loads and Efficient Pricing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 71(4), pages 585-610.
    14. Allen C. Miller, III & Thomas R. Rice, 1983. "Discrete Approximations of Probability Distributions," Management Science, INFORMS, vol. 29(3), pages 352-362, March.
    15. Kjetil Høyland & Stein W. Wallace, 2001. "Generating Scenario Trees for Multistage Decision Problems," Management Science, INFORMS, vol. 47(2), pages 295-307, February.
    16. Sherali, Hanif D. & Soyster, Allen L. & Murphy, Frederic H. & Sen, Suvrajeet, 1982. "Linear programming based analysis of marginal cost pricing in electric utility capacity expansion," European Journal of Operational Research, Elsevier, vol. 11(4), pages 349-360, December.
    17. Knaut, Andreas & Tode, Christian & Lindenberger, Dietmar & Malischek, Raimund & Paulus, Simon & Wagner, Johannes, 2016. "The reference forecast of the German energy transition—An outlook on electricity markets," Energy Policy, Elsevier, vol. 92(C), pages 477-491.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hoffmann, Maximilian & Priesmann, Jan & Nolting, Lars & Praktiknjo, Aaron & Kotzur, Leander & Stolten, Detlef, 2021. "Typical periods or typical time steps? A multi-model analysis to determine the optimal temporal aggregation for energy system models," Applied Energy, Elsevier, vol. 304(C).
    2. Benjamin Böcker & Robin Leisen & Christoph Weber, "undated". "Optimal capacity adjustments in electricity market models – an iterative approach based on operational margins and the relevant supply stack," EWL Working Papers 1806, University of Duisburg-Essen, Chair for Management Science and Energy Economics.
    3. Maximilian Hoffmann & Leander Kotzur & Detlef Stolten & Martin Robinius, 2020. "A Review on Time Series Aggregation Methods for Energy System Models," Energies, MDPI, vol. 13(3), pages 1-61, February.
    4. Arne Pöstges & Christoph Weber, "undated". "Identifying key elements for adequate simplifications of investment choices - The case of wind energy expansion," EWL Working Papers 2101, University of Duisburg-Essen, Chair for Management Science and Energy Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maximilian Hoffmann & Leander Kotzur & Detlef Stolten & Martin Robinius, 2020. "A Review on Time Series Aggregation Methods for Energy System Models," Energies, MDPI, vol. 13(3), pages 1-61, February.
    2. Botor, Benjamin & Böcker, Benjamin & Kallabis, Thomas & Weber, Christoph, 2021. "Information shocks and profitability risks for power plant investments – impacts of policy instruments," Energy Economics, Elsevier, vol. 102(C).
    3. Mier, Mathias, 2021. "Efficient pricing of electricity revisited," Energy Economics, Elsevier, vol. 104(C).
    4. Correia-da-Silva, João & Soares, Isabel & Fernández, Raquel, 2020. "Impact of dynamic pricing on investment in renewables," Energy, Elsevier, vol. 202(C).
    5. Arellano, M. Soledad & Serra, Pablo, 2007. "Spatial peak-load pricing," Energy Economics, Elsevier, vol. 29(2), pages 228-239, March.
    6. Klaus Eisenack & Mathias Mier, 2019. "Peak-load pricing with different types of dispatchability," Journal of Regulatory Economics, Springer, vol. 56(2), pages 105-124, December.
    7. Qenani-Petrela, Eivis & Wandschneider, Philip R. & Mittelhammer, Ronald C. & McCluskey, Jill J., 2002. "Investing In Farm Worker Housing: A Multi-Season Peak-Load Analysis Of Washington State Data," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36553, Western Agricultural Economics Association.
    8. Steffen, Bjarne & Weber, Christoph, 2013. "Efficient storage capacity in power systems with thermal and renewable generation," Energy Economics, Elsevier, vol. 36(C), pages 556-567.
    9. Bahl, Björn & Kümpel, Alexander & Seele, Hagen & Lampe, Matthias & Bardow, André, 2017. "Time-series aggregation for synthesis problems by bounding error in the objective function," Energy, Elsevier, vol. 135(C), pages 900-912.
    10. Alayo, Hans & García, Raúl, 2015. "A static deterministic linear peak-load pricing model for the electricity industry: Application to the Peruvian case," Energy Economics, Elsevier, vol. 50(C), pages 202-206.
    11. Tchai Tavor & Limor Dina Gonen & Uriel Spiegel, 2019. "Optimal Pricing and Capacity Under Well-Defined and Well-Known Deterministic Demand Fluctuations," Review of European Studies, Canadian Center of Science and Education, vol. 11(2), pages 1-15, December.
    12. Chao, Hung-po, 2011. "Efficient pricing and investment in electricity markets with intermittent resources," Energy Policy, Elsevier, vol. 39(7), pages 3945-3953, July.
    13. Mathias Mier, 2018. "Policy Implications of a World with Renewables, Limited Dispatchability, and Fixed Load," Working Papers V-412-18, University of Oldenburg, Department of Economics, revised Jul 2018.
    14. Tanaka, Ken'ichiro & Toda, Alexis Akira, 2015. "Discretizing Distributions with Exact Moments: Error Estimate and Convergence Analysis," University of California at San Diego, Economics Working Paper Series qt7g23r5kh, Department of Economics, UC San Diego.
    15. Grimm, Veronika & Schewe, Lars & Schmidt, Martin & Zöttl, Gregor, 2017. "Uniqueness of market equilibrium on a network: A peak-load pricing approach," European Journal of Operational Research, Elsevier, vol. 261(3), pages 971-983.
    16. Lorenzo Rocco, 2002. "Pricing of an Endogenous Peak-Load," Working Papers 54, University of Milano-Bicocca, Department of Economics, revised Aug 2002.
    17. Topaloglou, Nikolas & Vladimirou, Hercules & Zenios, Stavros A., 2020. "Integrated dynamic models for hedging international portfolio risks," European Journal of Operational Research, Elsevier, vol. 285(1), pages 48-65.
    18. Richard Schuler, 2012. "Pricing the use of capital-intensive infrastructure over time and efficient capacity expansion: illustrations for electric transmission investment," Journal of Regulatory Economics, Springer, vol. 41(1), pages 80-99, February.
    19. Simshauser, Paul, 2018. "Price discrimination and the modes of failure in deregulated retail electricity markets," Energy Economics, Elsevier, vol. 75(C), pages 54-70.
    20. Haldrup, Niels & Nielsen, Morten Orregaard, 2006. "A regime switching long memory model for electricity prices," Journal of Econometrics, Elsevier, vol. 135(1-2), pages 349-376.

    More about this item

    Keywords

    Time series aggregation; Capacity planning; Peak-load-pricing;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:59:y:2019:i:c:6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.